Martek predicts moderate growth in 2009

By staff reporter

- Last updated on GMT

Related tags: Infant formula, Docosahexaenoic acid, Martek

The financial slowdown has hit global DHA (docosahexaenoic acid) market leader, Martek Biosciences, which has forecast only moderate growth for the coming year, after several years of strong growth.

Delivering its Q4 results which saw revenues jump 10 per cent year-on-year to $90.4m from $82m, Martek said the economic situation had become “challenging”.​ The company had yearly revenue of​$336.6m and earned $37.7m.

For the quarter end October 31, income fell to $10.5m, down 43 percent from $18.3m in Q4 in 2007.

The company noted the ongoing good performance of the infant nutrition sector which accounted for $77.3m of its quarterly revenue. Non-infant projects had also gathered steam in the year.

It said its performance had been aided by enhanced DHA yields, increased capacity utilization at Martek's manufacturing facilities, and reductions in ARA (arachidonic acid) costs.

“These margin improvements were attained by the Company despite experiencing increases in both utility and raw material costs during fiscal 2008,”​ the company said, which spent eight percent of its revenue on research and development.

Looking forward, the Maryland-based company, whose algae-sourced ingredients have come to dominate the infant formula market, at least in North America, the company remained optimistic, if slightly more cautious than in previous missives.

"During the year, we increased penetration in international infant formula markets, expanded the use of DHA outside of infant formula and significantly improved our profitability and cash flow generation,”​ said chief executive officer, Steve Dubin.

“These solid results have yielded a strong year-end balance sheet that includes over $100 million in cash and cash equivalents and is essentially debt-free. While economic conditions will present challenges, I believe that Martek is well-positioned to deliver revenue and profit growth in the year ahead."

In the quarter, dietary supplements sales rose 22 percent to $5.4m; non-nutritional products doubled to $1.3m and contract manufacturing grew 24 percent to $3.7 million.

Recent product introductions include bars, soy milks, truffles and tortillas.

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